Good morning. It is a
great honor for me to join you at the New Economic School. Michelle
and I are so pleased to be in Moscow. And as somebody who was born
in Hawaii, I'm glad to be here in July instead of January.

I know that NES is a
young school, but I speak to you today with deep respect for
Russia's timeless heritage. Russian writers have helped us
understand the complexity of the human experience, and recognize
eternal truths. Russian painters, composers, and dancers have
introduced us to new forms of beauty. Russian scientists have cured
disease, sought new frontiers of progress, and helped us go to
space.

These are contributions
that are not contained by Russia's borders, as vast as those borders
are. Indeed, Russia's heritage has touched every corner of the
world, and speaks to the humanity that we share. That includes my
own country, which has been blessed with Russian immigrants for
decades; we've been enriched by Russian culture, and enhanced by
Russian cooperation. And as a resident of Washington, D.C., I
continue to benefit from the contributions of Russians --
specifically, from Alexander Ovechkin. We're very pleased to have
him in Washington, D.C.

Here at NES, you have inherited this great cultural legacy, but your
focus on economics is no less fundamental to the future of humanity.
As Pushkin said, "Inspiration is needed in geometry just as much as
poetry." And today, I want particularly to speak to those of you
preparing to graduate. You're poised to be leaders in academia and
industry; in finance and government. But before you move forward,
it's worth reflecting on what has already taken place during your
young lives.

Like President Medvedev
and myself, you're not old enough to have witnessed the darkest
hours of the Cold War, when hydrogen bombs were tested in the
atmosphere, and children drilled in fallout shelters, and we reached
the brink of nuclear catastrophe. But you are the last generation
born when the world was divided. At that time, the American and
Soviet armies were still massed in Europe, trained and ready to
fight. The ideological trenches of the last century were roughly in
place. Competition in everything from astrophysics to athletics was
treated as a zero-sum game. If one person won, then the other person
had to lose.

And then, within a few
short years, the world as it was ceased to be. Now, make no mistake:
This change did not come from any one nation. The Cold War reached a
conclusion because of the actions of many nations over many years,
and because the people of Russia and Eastern Europe stood up and
decided that its end would be peaceful.

With the end of the Cold
War, there were extraordinary expectations -- for peace and for
prosperity; for new arrangements among nations, and new
opportunities for individuals. Like all periods of great change, it
was a time of ambitious plans and endless possibilities. But, of
course, things don't always work out exactly as planned. Back in
1993, shortly after this school opened, one NES student summed up
the difficulty of change when he told a reporter, and I quote him:
"The real world is not so rational as on paper." The real world is
not so rational as on paper.

Over two tumultuous
decades, that truth has been borne out around the world. Great
wealth has been created, but it has not eliminated vast pockets of
crushing poverty. Poverty exists here, it exists in the United
States, and it exists all around the world. More people have gone to
the ballot box, but too many governments still fail to protect the
rights of their people. Ideological struggles have diminished, but
they've been replaced by conflicts over tribe and ethnicity and
religion. A human being with a computer can hold the same amount of
information stored in the Russian State Library, but that technology
can also be used to do great harm.

In a new Russia, the
disappearance of old political and economic restrictions after the
end of the Soviet Union brought both opportunity and hardship. A few
prospered, but many more did not. There were tough times. But the
Russian people showed strength and made sacrifices, and you achieved
hard-earned progress through a growing economy and greater
confidence. And despite painful times, many in Eastern Europe and
Russia are much better off today than 20 years ago.

We see that progress
here at NES -- a school founded with Western support that is now
distinctly Russian; a place of learning and inquiry where the test
of an idea is not whether it is Russian or American or European, but
whether it works. Above all, we see that progress in all of you --
young people with a young century to shape as you see fit.

Your lifetime coincides with this era of transition. But think about
the fundamental questions asked when this school was founded. What
kind of future is Russia going to have? What kind of future are
Russia and America going to have together? What world order will
replace the Cold War? Those questions still don't have clear
answers, and so now they must be answered by you -- by your
generation in Russia, in America, and around the world. You get to
decide. And while I cannot answer those questions for you, I can
speak plainly about the future that America is seeking.

To begin with, let me be
clear: America wants a strong, peaceful, and prosperous Russia. This
belief is rooted in our respect for the Russian people, and a shared
history between our nations that goes beyond competition. Despite
our past rivalry, our people were allies in the greatest struggle of
the last century. Recently, I noted this when I was in Normandy --
for just as men from Boston and Birmingham risked all that they had
to storm those beaches and scale those cliffs, Soviet soldiers from
places like Kazan and Kiev endured unimaginable hardships to repeal
-- to repel an invasion, and turn the tide in the east. As President
John Kennedy said, "No nation in history of battle ever suffered
more than the Soviet Union in the Second World War."

So as we honor this
past, we also recognize the future benefit that will come from a
strong and vibrant Russia. Think of the issues that will define your
lives: security from nuclear weapons and extremism; access to
markets and opportunity; health and the environment; an
international system that protects sovereignty and human rights,
while promoting stability and prosperity. These challenges demand
global partnership, and that partnership will be stronger if Russia
occupies its rightful place as a great power.

Yet unfortunately, there
is sometimes a sense that old assumptions must prevail, old ways of
thinking; a conception of power that is rooted in the past rather
than in the future. There is the 20th century view that the United
States and Russia are destined to be antagonists, and that a strong
Russia or a strong America can only assert themselves in opposition
to one another. And there is a 19th century view that we are
destined to vie for spheres of influence, and that great powers must
forge competing blocs to balance one another.

These assumptions are
wrong. In 2009, a great power does not show strength by dominating
or demonizing other countries. The days when empires could treat
sovereign states as pieces on a chess board are over.
As I
said in Cairo, given our independence, any world order
that -- given our interdependence, any world order that tries to
elevate one nation or one group of people over another will
inevitably fail. The pursuit of power is no longer a zero-sum game
-- progress must be shared.

That's why I have called
for a "reset" in relations between the United States and Russia.
This must be more than a fresh start between the Kremlin and the
White House -- though that is important and I've had excellent
discussions with both your President and your Prime Minister. It
must be a sustained effort among the American and Russian people to
identify mutual interests, and expand dialogue and cooperation that
can pave the way to progress.

This will not be easy.
It's difficult to forge a lasting partnership between former
adversaries, it's hard to change habits that have been ingrained in
our governments and our bureaucracies for decades. But I believe
that on the fundamental issues that will shape this century,
Americans and Russians share common interests that form a basis for
cooperation. It is not for me to define Russia's national
interests, but I can tell you about America's national interests,
and I believe that you will see that we share common ground.

First, America has an
interest in reversing the spread of nuclear weapons and preventing
their use.

In the last century,
generations of Americans and Russians inherited the power to destroy
nations, and the understanding that using that power would bring
about our own destruction. In 2009, our inheritance is different.
You and I don't have to ask whether American and Russian leaders
will respect a balance of terror -- we understand the horrific
consequences of any war between our two countries. But we do have to
ask this question: We have to ask whether extremists who have killed
innocent civilians in New York and in Moscow will show that same
restraint. We have to ask whether 10 or 20 or 50 nuclear-armed
nations will protect their arsenals and refrain from using them.

This is the core of the
nuclear challenge in the 21st century. The notion that prestige
comes from holding these weapons, or that we can protect ourselves
by picking and choosing which nations can have these weapons, is an
illusion. In the short period since the end of the Cold War, we've
already seen India, Pakistan, and North Korea conduct nuclear tests.
Without a fundamental change, do any of us truly believe that the
next two decades will not bring about the further spread of these
nuclear weapons?

That's why America is
committed to stopping nuclear proliferation, and ultimately seeking
a world without nuclear weapons. That is consistent with our
commitment under the Nuclear Non-Proliferation Treaty. That is our
responsibility as the world's two leading nuclear powers. And while
I know this goal won't be met soon, pursuing it provides the legal
and moral foundation to prevent the proliferation and eventual use
of nuclear weapons.

We're already taking
important steps to build this foundation. Yesterday, President
Medvedev and I made progress on negotiating a new treaty that will
substantially reduce our warheads and delivery systems. We renewed
our commitment to clean, safe and peaceful nuclear energy, which
must be a right for all nations that live up to their
responsibilities under the NPT. And we agreed to increase
cooperation on nuclear security, which is essential to achieving the
goal of securing all vulnerable nuclear material within four years.

As we keep our own
commitments, we must hold other nations accountable for theirs.
Whether America or Russia, neither of us would benefit from a
nuclear arms race in East Asia or the Middle East. That's why we
should be united in opposing North Korea's efforts to become a
nuclear power, and opposing Iran's efforts to acquire a nuclear
weapon. And I'm pleased that President Medvedev and I agreed upon a
joint threat assessment of the ballistic challenges -- ballistic
missile challenges of the 21st century, including from Iran and
North Korea.

This is not about
singling out individual nations -- it's about the responsibilities
of all nations. If we fail to stand together, then the NPT and the
Security Council will lose credibility, and international law will
give way to the law of the jungle. And that benefits no one. As I
said in Prague, rules must be binding, violations must be punished,
and words must mean something.

The successful
enforcement of these rules will remove causes of disagreement. I
know Russia opposes the planned configuration for missile defense in
Europe. And my administration is reviewing these plans to enhance
the security of America, Europe and the world. And I've made it
clear that this system is directed at preventing a potential attack
from Iran. It has nothing to do with Russia. In fact, I want to work
together with Russia on a missile defense architecture that makes us
all safer. But if the threat from Iran's nuclear and ballistic
missile program is eliminated, the driving force for missile defense
in Europe will be eliminated, and that is in our mutual interests.

Now, in addition to
securing the world's most dangerous weapons, a second area where
America has a critical national interest is in isolating and
defeating violent extremists.

For years, al Qaeda and
its affiliates have defiled a great religion of peace and justice,
and ruthlessly murdered men, women and children of all nationalities
and faiths. Indeed, above all, they have murdered Muslims. And these
extremists have killed in Amman and Bali; Islamabad and Kabul; and
they have the blood of Americans and Russians on their hands.
They're plotting to kill more of our people, and they benefit from
safe havens that allow them to train and operate -- particularly
along the border of Pakistan and Afghanistan.

And that's why America
has a clear goal: to disrupt, dismantle, and defeat al Qaeda and its
allies in Afghanistan and Pakistan. We seek no bases, nor do we want
to control these nations. Instead, we want to work with
international partners, including Russia, to help Afghans and
Pakistanis advance their own security and prosperity. And that's why
I'm pleased that Russia has agreed to allow the United States to
supply our coalition forces through your territory. Neither America
nor Russia has an interest in an Afghanistan or Pakistan governed by
the Taliban. It's time to work together on behalf of a different
future -- a future in which we leave behind the great game of the
past and the conflict of the present; a future in which all of us
contribute to the security of Central Asia.

Now, beyond Afghanistan,
America is committed to promoting the opportunity that will isolate
extremists. We are helping the Iraqi people build a better future,
and leaving Iraq to the Iraqis. We're pursuing the goal of two
states, Israel and Palestine, living in peace and security. We're
partnering with Muslim communities around the world to advance
education, health, and economic development. In each of these
endeavors, I believe that the Russian people share our goals, and
will benefit from success -- and we need to partner together.

Now, in addition to
these security concerns, the third area that I will discuss is
America's interest in global prosperity. And since we have so many
economists and future businessmen and women in the room, I know this
is of great interest to you.

We meet in the midst of
the worst global recession in a generation. I believe that the free
market is the greatest force for creating and distributing wealth
that the world has known. But wherever the market is allowed to run
rampant -- through excessive risk-taking, a lack of regulation, or
corruption -- then all are endangered, whether we live on the
Mississippi or on the Volga.

In America, we're now
taking unprecedented steps to jumpstart our economy and reform our
system of regulation. But just as no nation can wall itself off from
the consequences of a global crisis, no one can serve as the sole
engine of global growth. You see, during your lives, something
fundamental has changed. And while this crisis has shown us the
risks that come with change, that risk is overwhelmed by
opportunity.

Think of what's possible today that was unthinkable two decades ago.
A young woman with an Internet connection in Bangalore, India can
compete with anybody anywhere in the world. An entrepreneur with a
start-up company in Beijing can take his business global. An NES
professor in Moscow can collaborate with colleagues at Harvard or
Stanford. That's good for all of us, because when prosperity is
created in India, that's a new market for our goods; when new ideas
take hold in China, that pushes our businesses to innovate; when new
connections are forged among people, all of us are enriched.

There is extraordinary
potential for increased cooperation between Americans and Russians.
We can pursue trade that is free and fair and integrated with the
wider world. We can boost investment that creates jobs in both our
countries, we can forge partnerships on energy that tap not only
traditional resources, like oil and gas, but new sources of energy
that will drive growth and combat climate change. All of that,
Americans and Russians can do together.

Now, government can
promote this cooperation, but ultimately individuals must advance
this cooperation, because the greatest resource of any nation in the
21st century is you. It's people; it's young people especially. And
the country which taps that resource will be the country that will
succeed. That success depends upon economies that function within
the rule of law. As President Medvedev has rightly said, a mature
and effective legal system is a condition for sustained economic
development. People everywhere should have the right to do business
or get an education without paying a bribe. Whether they are in
America or Russia or Africa or Latin America, that's not a American
idea or a Russian idea -- that's how people and countries will
succeed in the 21st century.

And this brings me to
the fourth issue that I will discuss -- America's interest in
democratic governments that protect the rights of their people.

By no means is America
perfect. But it is our commitment to certain universal values which
allows us to correct our imperfections, to improve constantly, and
to grow stronger over time. Freedom of speech and assembly has
allowed women, and minorities, and workers to protest for full and
equal rights at a time when they were denied. The rule of law and
equal administration of justice has busted monopolies, shut down
political machines that were corrupt, ended abuses of power.
Independent media have exposed corruption at all levels of business
and government. Competitive elections allow us to change course and
hold our leaders accountable. If our democracy did not advance those
rights, then I, as a person of African ancestry, wouldn't be able to
address you as an American citizen, much less a President. Because
at the time of our founding, I had no rights -- people who looked
like me. But it is because of that process that I can now stand
before you as President of the United States.

So around the world,
America supports these values because they are moral, but also
because they work. The arc of history shows that governments which
serve their own people survive and thrive; governments which serve
only their own power do not. Governments that represent the will of
their people are far less likely to descend into failed states, to
terrorize their citizens, or to wage war on others. Governments that
promote the rule of law, subject their actions to oversight, and
allow for independent institutions are more dependable trading
partners. And in our own history, democracies have been America's
most enduring allies, including those we once waged war with in
Europe and Asia -- nations that today live with great security and
prosperity.

Now let me be clear:
America cannot and should not seek to impose any system of
government on any other country, nor would we presume to choose
which party or individual should run a country. And we haven't
always done what we should have on that front. Even as we meet here
today, America supports now the restoration of the
democratically-elected President of Honduras, even though he has
strongly opposed American policies. We do so not because we agree
with him. We do so because we respect the universal principle that
people should choose their own leaders, whether they are leaders we
agree with or not.

And that leads me to the
final area that I will discuss, which is America's interest in an
international system that advances cooperation while respecting the
sovereignty of all nations.

State sovereignty must
be a cornerstone of international order. Just as all states should
have the right to choose their leaders, states must have the right
to borders that are secure, and to their own foreign policies. That
is true for Russia, just as it is true for the United States. Any
system that cedes those rights will lead to anarchy. That's why we
must apply this principle to all nations -- and that includes
nations like Georgia and Ukraine. America will never impose a
security arrangement on another country. For any country to become a
member of an organization like NATO, for example, a majority of its
people must choose to; they must undertake reforms; they must be
able to contribute to the Alliance's mission. And let me be clear:
NATO should be seeking collaboration with Russia, not confrontation.

And more broadly, we
need to foster cooperation and respect among all nations and
peoples. As President of the United States, I will work tirelessly
to protect America's security and to advance our interests. But no
one nation can meet the challenges of the 21st century on its own,
nor dictate its terms to the world. That is something that America
now understands, just as Russia understands. That's why America
seeks an international system that lets nations pursue their
interests peacefully, especially when those interests diverge; a
system where the universal rights of human beings are respected, and
violations of those rights are opposed; a system where we hold
ourselves to the same standards that we apply to other nations, with
clear rights and responsibilities for all.

There was a time when
Roosevelt, Churchill, and Stalin could shape the world in one
meeting. Those days are over. The world is more complex today.
Billions of people have found their voice, and seek their own
measure of prosperity and self-determination in every corner of the
planet. Over the past two decades, we've witnessed markets grow,
wealth spread, and technology used to build -- not destroy. We've
seen old hatreds pass, illusions of differences between people lift
and fade away; we've seen the human destiny in the hands of more and
more human beings who can shape their own destinies. Now, we must
see that the period of transition which you have lived through
ushers in a new era in which nations live in peace, and people
realize their aspirations for dignity, security, and a better life
for their children. That is America's interest, and I believe that
it is Russia's interest as well.

I know that this future
can seem distant. Change is hard. In the words of that NES student
back in 1993, the real world is not so rational as on paper. But
think of the change that has unfolded with the passing of time. One
hundred years ago, a czar ruled Russia, and Europe was a place of
empire. When I was born, segregation was still the law of the land
in parts of America, and my father's Kenya was still a colony. When
you were born, a school like this would have been impossible, and
the Internet was only known to a privileged few.

You get to decide what
comes next. You get to choose where change will take us, because the
future does not belong to those who gather armies on a field of
battle or bury missiles in the ground; the future belongs to young
people with an education and the imagination to create. That is the
source of power in this century. And given all that has happened in
your two decades on Earth, just imagine what you can create in the
years to come.

Every country charts its
own course. Russia has cut its way through time like a mighty river
through a canyon, leaving an indelible mark on human history as it
goes. As you move this story forward, look to the future that can be
built if we refuse to be burdened by the old obstacles and old
suspicions; look to the future that can be built if we partner on
behalf of the aspirations we hold in common. Together, we can build
a world where people are protected, prosperity is enlarged, and our
power truly serves progress. And it is all in your hands. Good luck
to all of you.